Steatosis is the earliest and most prevalent stage of non-alcoholic fatty liver disease (NAFLD). Although steatosis generally has a benign outcome, some individuals develop progressive liver injury (steatohepatitis or NASH). An issue of primary importance to the understanding of NAFLD remains the study of the biochemical events that change the natural history of the disease from steatosis to NASH. A large majority of obese patients have hepatic steatosis and approximately 30% have NASH. This link is noteworthy, due both to the current obesity epidemic and the increased prevalence of liver damage in obese subjects. Disease progression in NAFLD is currently thought to be triggered by an acute insult or "second hit" that is superimposed on hepatic steatosis. However, the identity and nature of this "second hit" remains elusive. In this application, we demonstrate that the composition of fatty acids in the steatotic liver is variable in human obesity. Using dietary models of hepatic steatosis characterized by similar accumulation of total triglyceride but different compositions of fatty acids, we show that steatosis characterized by accumulation of saturated fatty acids leads to increased liver injury and reduced proliferative capacity. Preliminary data suggest that the link between accumulation of saturated fatty acids in the steatotic liver and liver cell injury involves ceramide and the selective upregulation of proapoptotic endoplasmic reticulum proteins. These data lead to the novel hypothesis that the composition of fatty acids in the steatotic liver is an important determinant of liver injury, and therefore may constitute an intrinsic "second hit". Therefore, the specific aim of this application is to elucidate how saturated fatty acids in the steatotic liver lead to increased liver cell injury. Studies will examine whether 1) de novo ceramide synthesis mediates saturated fatty acid induction of liver injury, 2) differences in fatty acid trafficking determine cytotoxicity, and 3) saturated fatty acids initiate liver cell injury through an endoplasmic reticulum localized apoptotic response.